Law:

Section:

(a) Contract Act (IX of 1872) -- S.126 Bank guarantee Default Liquidated damages ¬Interest Rights and liabilities of the parties -Determination Guarantee rights and liabilities of the parties, are determined with reference to the terms and conditions of the guarantee and a contract of guarantee is to be strictly construed in terms of the guarantee Guarantee in the present case unequivocally postulated that the total responsibility of the Bank was restricted to a specified amount Bank irrevocably and unconditionally undertook to pay the said amount to the plaintiff on demand Nothing was brought on record to show that the plaintiff had sustained damages on the ground of default Effect ¬Liquidated damages as a rule, required the positive evidence to show that the actual loss was suffered by the party claiming the damages and even fixed amount stipulated for liquidated damages could not be recovered if the quantum of actual loss was not proved Plaintiff, in circumstances, was neither entitled to any interest nor to any amount as liquidated damages. (b) Interpretation of document --- Fundamental principle. It is a fundamental principle of interpretation of documents and statutes that they are to be interpreted in their entire context following a full consideration of all provisions of the document or statute, as the case may be, that every attempt shall be made to save the document and for this purpose a difference between general statements and particular statements of the document be differentiated properly to save the document rather to nullify it that no provision of the document be read in isolation or in bits and pieces but the entire document is to be read as a whole to gather the intention of the parties, that the Court for this purpose can resort to the correspondence exchanged between the parties, that the Court shall lean to an interpretation which will effectuate rather than one which will invalidate an instrument. Allah Bakhsh and another v. Muhammad Ishaque and another PLD 1984 SC 47; Societe Generale De Surveillance S.A. v. Pakistan 2002 SCMR 1694; Messrs Pakistan State Oil Company Limited v. Muhammad Tahir Khan and others PLD 2001 SC 980; Sandoz…

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